All Forum Posts by: Chavdar Kehayov

$4100 per month. Tenats pay electric. The owner pays the rest /gas, water, sewage/

thank you

Hi,

I need help structuring a deal. I found a 4plex with a flexible owner.

Asking price $450k
NOI: $4100 per month
Taxes: $5000
Insurance: $3000
Sewage: $1300
Water: $1000

Owner pays the gas for the whole building about $3500 - $5000 per year
Every unit has separated electric meters

There is a 230k mortgage on the property with monthly payment of $2300 Taxes and Insurance are included in the payment.

I offered full asking price if he agrees on my terms. I would like to take title of the property, continuing making the payments of the existing mortgage and creating a second mortgage for the rest of the amount. I’ll be paying only interest on the second mortgage /depreciated over 30 years at 6%/. After one year I’ll refinance the property and the seller cash out. When I do the numbers looks like that there is about $400 of cash flow.

My question is: Could you please help me /advise me/ how to structure the whole deal and what should be aware of.

What the best way to take the ownership /llc, land trust/. How to avoid the due on sale clause?
What paperwork is involved? What is my risk? What is the seller’s risk? Should I allow him to put a lean again other properties I have to secure the second mortgage that he will carry? How the refinancing is going to work /existing first mortgage, second mortgage/ Title on a different name.

This is my first creative RE deal and I don’t know to structure it. Yes, I’ll use a good attorney, but I want to be prepared with the questions.

Thank you very much for your time.

Your advices are highly appreciated

Best Regards
Chavdar

I am closing on 3 properties next month. 2 will be on my name and 3th one I bought with a partner 50/50 using FHA loan. Here is my challenge what it will be the best way to me to have a legal protection and hide my name. I was considering put each property in a separate LLC, but then I don't to have any problems with the due on sale clause. Furthermore I have to keep the properties for while on my name before transfer those to the LLC and then it still my trigger the due on sale clause. I am really worried for the FHA loan. Somebody mention that using land trust is the solution for my problem.
Could you please advise me what I can do in my situation? I am interested in the tax aspect as well, because I want to offset loses against my w2 income.
Can I record the deeds directly to land trust at closing?
Who will hold the title the trustee or the benefiter?
Who should be the trustee?

Your help will be highly appreciated.
Chavdar

Thank you for the information. I spoke with my attorney and a couple mortgage brokers. It looks like at closing I’ll sign the loans on my personal name, but the deeds will be recorded on the names of the LLCs. Do you see any problem in that?

Single Family houses
7br and 5br
I have both of the under contract. The closing is scheduled for April 30th.

Thank you for the quick response. Because the LLC's are brand new and they don't have any credit history the banks won't give the financing directly on the LLC, I'll have to personally guarantee the loans and unfortunately they will appear on my credit report. I don't know any other way to do it. As you said the brokers are not smart and they told me that there won't be a problem to record the deeds with the LLC names, but I am not sure that this is going to happen. What you'll advise me. How to handle this situation.

Hi guys,
I have two properties under contract and the financing is arranged with two different banks. The challenge is when we are closing I want to record the deeds on the names of two LLC I just establish. Do you think this will be a problem? My mortgage broker is not very sure about it and I need just to double check before I proceed to the closing. The loan types are for Investment properties and I am going to be personally liable for the loans.
Thank you very much
Chavdar Kehayov

Thank you very much Debbie! Now I know the right questions to ask my lawyers. I have to figure out only one more thing. I was thinking to establishing Delaware LLC and acquire properties in multiple states. Do you think that one LLC and multiple land trust is good idea? I know it's not the best possible asset protection, but it's good start and it's much better than having everything on your name.

Thank you again for your time.
Chavdar

Hi Debbie, Could you please explain how the land trust and the LLC works. On which name the mortgage is going to be? Thank you

Thank you Debbie, your answer, is very helpful. Let me, ask you something else. You said that you have multiple properties on your name. Is it true that you can take off the mortgages from your credit report when the properties are placed into trusts? Thank you